Nicolae Ceauşescu: Encyclopedia II - Nicolae Ceauşescu - Foreign debt

Nicolae Ceauşescu - Foreign debt

Despite his increasingly totalitarian rule, Ceauşescu's political independence from the Soviet Union and his protests against the invasion of Czechoslovakia in 1968 drew the interest of Western powers, who briefly believed he was an anti-Soviet maverick, and hoped to create a schism in the Warsaw Pact by funding him. Ceauşescu did not realize that the funding was not always very favourable. Ceauşescu was able to borrow heavily from the west to finance economic development programs, but these loans ultimately devastated the country's financial situation. In an attempt to correct this situation, Ceauşescu decided to eradicate Romania's foreign debts. He organized a referendum and managed to change the constitution, adding a clause that barred Romania from taking foreign debts in the future. The referendum yielded a nearly unanimous "yes" vote.

In the 1980s, Ceauşescu ordered the export of much of the country's agricultural and industrial production in order to repay its debts. The resulting domestic shortages made the everyday life of Romanian citizens a fight for survival as food rationing was introduced and heating, gas and electricity black-outs were becoming the rule. There was a steady decrease in the living standard (and especially the availability of food and general goods in stores) between 1980 and 1989. The official explanation was that the country was paying its debts, and people accepted the suffering, believing it to be for a short time only and for the ultimate good.

The debt was fully paid in summer 1989, shortly before Ceauşescu was overthrown. During that period, state television often showed Ceauşescu entering well stocked stores.

The constitutional prohibition of debt was the first thing changed, without any referendum, by the leaders of the FSN as they assumed power after the December 1989 revolution.

Adapted from the Wikipedia article "Foreign debt", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki